Editorial: Treaty body's final view is what's needed

The Prime Minister has yet to indicate whether he will abide by the tribunal's interim recommendation. Photo / Christine Cornege

The Labour leader, David Shearer, was clearly overegging things when he claimed this week that the Government's asset sales programme was descending into a "shambles".

It was, however, easy to see where he was coming from. Such has been the delay that the part-sale of power companies, starting with Mighty River, now seems unlikely to start in the third quarter, as was the Government's preference.

Impeding that is an interim recommendation from the Waitangi Tribunal to delay the sale of Mighty River shares while it addresses what rights and interests in water and geothermal resources are protected by the Treaty, and whether the sale of minority stakes in the power companies affects the Crown's ability to recognise those rights and remedy them.

It will take until sometime next month to produce its full report. Given the relative brevity of that timetable, it seems odd that the tribunal did not skip the work needed for the interim recommendation and concentrate on its final reckoning. There would then have been sufficient time for it to deliver that before the sales programme was to start.

The Prime Minister has yet to indicate whether he will abide by the tribunal's interim recommendation.

On the one hand, he will be a little irked that its handling of the Maori Council's claim is being dragged out.

But, on the other, he may not be overly concerned if the Mighty River float is shifted back only so far as, say, November. The controversy over the share loyalty bonus scheme, in particular, has placed a greater onus on the Government to get the sales details right. This has become more important than the precise timing of the share float, and the extra weeks to ready Mighty River can be put to good use.

Consequently, there is little reason for John Key to disregard the tribunal's interim recommendation and plough ahead with the sales programme.

Doing that would almost certainly prompt court action by the Maori Council, sour relations with the Maori Party, and demonstrate anything but "good faith" with the process. The latter could also have a bearing on the tribunal's final finding, even though its thinking should not be influenced in this way.

The Prime Minister has already made one substantial misstep by noting dismissively that the tribunal's conclusions are non-binding.

As the council's lawyer, Felix Geiringer, has suggested, the real test for the Government will come after the tribunal's final finding is released.

This will include a verdict on the Maori Council's request for a longer delay while all water rights issues are resolved. This would take years, rather than months. If the tribunal rules for the claimant, that would be the death-knell for the Prime Minister's attempt to play down the water rights issue.

At that point, the Government could decide to proceed with the Mighty River float, while holding back some shares to settle the Maori Council's claim if, subsequently, it proved legally successful. Or it could press ahead while noting that it may need to repurchase shares for this purpose.

Both courses are far from ideal.

Holding back shares for the loyalty bonus scheme has already introduced a degree of uncertainty about the real value of those that are offered. The retention of even more shares could only increase this and deter potential investors, as would uncertainty over the outcome of court action.

At the moment, however, the Government will want more than anything to ensure the Waitangi Tribunal's full finding is not delayed beyond next month.

Its patience has already been tested by a process that seems to have been calculated to prolong the issue. Further frustration would serve only to strengthen the resolve of its opponents and, potentially, weaken its own.